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03/26/2014

Fed Chair Janet Yellen To Speak at ICBA Washington Policy Summit

ICBA NewsWatch Today 03/26/2014

GrassrootsFed Chair Janet Yellen To Speak at ICBA Washington Policy SummitFederal Reserve Chair Janet Yellen is scheduled to speak at this year’s ICBA Washington Policy Summit. Yellen, who took over as Fed chair in February, will address community bankers gathered in the nation’s capital on April 29-May 2. Community bankers in attendance will build on recent Volcker Rule, flood insurance and debit card interchange successes by meeting with their members of Congress and regulators. Also slated to speak at the ICBA Washington Policy Summit are Sen. Heidi Heitkamp (D-N.D.) and FDIC Chairman Martin Gruenberg. Registration for the summit is free for community bankers and a spouse or guest. Visit ICBA’s Washington Policy Summit webpage to register today and make sure your voice is being heard in Washington. Register Today.Too-Big-To-FailICBA: New York Fed Research Shows Too-Big-To-Fail Funding AdvantageICBA said that new Federal Reserve Bank of New York reports show that the nation’s largest banks enjoy a cost advantage over community banks because these systemically risky firms are considered too big to fail. In a statement, ICBA said the too-big-to-fail funding advantage distorts financial markets, exacerbates systemic risks and exposes taxpayers to additional bailouts of the largest megabanks. The association called for greater protections against future systemic crises and a more diverse financial system to mitigate financial risk while promoting competition, innovation and the availability of credit. ICBA reiterated its support for the Terminating Bailouts for Taxpayer Fairness (TBTF) Act (S. 798), which would require the largest and riskiest banks to hold more leverage equity capital to reduce their risks and avoid future taxpayer bailouts. The New York Fed released a series of 11 research papers that found that the too-big-to-fail problem is associated with funding advantages, increased levels of risk and moral hazard. The papers also track the evolution of bank complexity and support a policy of increasing long-term debt requirements in the amount of uninsured financial liabilities banks have issued. CapitalICBA Backs SEC JOBS Act Proposal to Enhance Small Company Access to CapitalICBA commended the Securities and Exchange Commission for a proposed rule that would provide community banks greater access to the capital market at a time when the need for capital has never been greater. The proposal would exempt offerings of up to $50 million in securities annually from the registration requirements of the Securities Act and relax standards toward investors. It would expand Regulation A into two tiers: Tier 1 for offerings of up to $5 million and Tier 2 for offerings between $5 million and $50 million. In a comment letter, ICBA wrote that the SEC’s proposed update would make Regulation A a viable alternative to Regulation D and give community banks another good choice for avoiding the costs and reporting requirements of a registered public offering. The association also encouraged the SEC to increase the maximum offering size of a Tier 1 offering to $10 million and to increase or eliminate the proposed 10 percent investment limitation for Tier 2 offerings, which would ensure greater utilization and better access to capital for community banks and other small companies.ICBA NewsWatch Today is sponsored by QwickRate:Loan activity picking up? In need of deposits to help round out funding? Post rates on QwickRate. Attract a steady flow of institutional, non-brokered deposits – no transaction fees! Schedule your personalized webinar tour and learn more.TechnologyFed: Growth in Mobile Banking, Payments ContinuesThe use of mobile phones to access bank and credit card accounts continued to increase among U.S. adults last year, according to the Federal Reserve Board. The Fed’s latest report on the use of mobile financial services found that 33 percent of all mobile phone users and 51 percent of smartphone users had used mobile banking in the past 12 months as of December 2013. This is up from 28 percent in December 2012 for mobile phone users and 48 percent for smartphone users. The Fed also said that the use of mobile phones to make payments at the point of sale has grown substantially over the past several years, increasing threefold between 2011 and 2012 and again between 2012 and 2013. Last year, 17 percent of smartphone owners, representing 9 percent of the U.S. adult population, reported having used their phone to make a purchase at a retail store in the previous 12 months. LendingCFPB: 80 Percent of Payday Loans Renewed within Two WeeksMost payday loans are made to borrowers who renew their loans so many times that they end up paying more in fees than the amount of money they originally borrowed, according to a Consumer Financial Protection Bureau report. The report found that payday loan borrowers get caught in a “revolving door of debt” by renewing their loans at increasing interest rates. Four out of five payday loans are rolled over or renewed within 14 days, the report found. More than 60 percent of payday loans are made to borrowers in the course of loan sequences lasting seven or more loans in a row. Additionally, 22 percent of new payday loans end up costing the borrower more than the amount borrowed, while 15 percent of borrowers repay all of their payday debts when due without re-borrowing within 14 days. The CFPB has authority to oversee the payday loan market. It began its supervision of payday lenders in January 2012. In November 2013, the CFPB began accepting complaints from borrowers regarding payday loans. The CFPB will review the new data from this report as it considers reforms to payday lending. EconomyCase-Shiller: Home Prices Continue to Rise Year-to-YearHome prices increased in January by more than 13 percent over the past year, according to the S&P/Case-Shilller home price indexes. The 10-city and 20-city indexes rose 13.5 percent and 13.2 percent, respectively. On a monthly basis, the 20-city index posted its third consecutive monthly decline of 0.1 percent, while the 10-city index increased slightly.EconomyNew-Home Sales Decrease in FebruaryNew-home sales declined 3.3 percent in February and were down 1.1 percent from a year ago, according to HUD and the Commerce Department. The median sales price was $261,800, and the average sales price was $317,500. The seasonally adjusted estimate of new houses for sale at the end of February was 189,000, a 5.2-month supply at the current sales rate.EconomyConsumer Confidence Improves in MarchConsumer confidence rose in March following a decline the previous month, according to the Consumer Confidence Index. The index rose to 82.3 from 78.3 in February. The Present Situation Index edged down to 80.4 from 81.0, while the Expectations Index increased to 83.5 from 76.5.PollTake This Week’s Quick PollTake this week’s Quick Poll on Community Banking Month, and view results from the previous poll on the 2014 ICBA Washington Policy Summit. View the Archive.EducationICBA Seminar Covers Advanced Community Bank IT IssuesExpanding technology is fueling a revolution in services available to community bank customers. As a result, information technology solutions are evolving daily to better secure these opportunities, increase efficiency and improve service capabilities. Technology officers and security officers tasked with managing technology solutions at their banks are invited to attend ICBA’s comprehensive Advanced Current Community Bank IT Issues seminar scheduled for April 16-17 in Minneapolis. Register Online.Products and ServicesWhite Paper: Compliance Officer 2.0Continuity Control, ICBA’s new Preferred Service Provider, is offering ICBA members a free white paper: “Compliance Officer 2.0—Are You Ready?” The role of the compliance officer has significantly changed, and examiner expectations have become much more stringent. Does your bank pass muster? Read this complimentary guide and accompanied self-assessment checklist to evaluate your readiness and determine what you need to do to make the transition. Download Now.